UK introduces sugar tax on soft drinks

  • 17/03/2016

A new sugar tax on the soft drinks industry will be introduced in the UK, Chancellor George Osborne has announced in his latest Budget.

The move has been welcomed by campaigners as a significant step in the fight against child obesity.

The tax is aimed at sugary drinks, particularly fizzy drinks, which studies have shown are popular with teenagers. Pure fruit juices and milk-based drinks will be excluded, and the smallest producers will have an exemption from the levy.

The tax will be imposed on companies according to the volume of the sugar-sweetened drinks they produce or distribute.

There will be two tax brackets -- one for total sugar content above 5 grams per 100 millilitres and a higher bracket for the most-sugary drinks: those with more than eight grams per 100 millilitres.

The £530 million (NZ$112 billion) expected to be raised annually by the sugar tax when it comes into force in two years' time will be spent on primary school sports in England, with the devolved administrations in Scotland, Wales and Northern Ireland free to decide how to spend their share.

The announcement sparked a big fall in the share price of soft drink makers.

Celebrity chef Jamie Oliver has welcomed the announcement, and has been campaigning for such a move. He told BBC News it was "a big moment in child health" and a "symbolic slap" to business, rather than "anti-business".

New Zealanders rank 11th in the world for soft drink consumption, knocking back 640 million litres a year.

A third of Kiwi adults and 10 percent of children are obese. It's been called the single biggest threat to New Zealanders' health, and it's estimated the cost to the country will top $8 billion in the next 10 years.

Anti-sugar campaigner Dr Gerhard Sundborn of FIZZ (Fighting Sugar in Soft Drinks) says education is not enough.

"We've tried to educate around this issue and exercise through the obesity epidemic, but that will never work for us -- it needs to be supported by good fiscal policy and regulation, and a tax on sugary drinks is one of the things that must be included as part of our plan to tackle obesity."

The Government revealed its childhood obesity plan last year, but fell short of imposing a tax.

 "Our position on a sugar tax hasn't changed -- it's not something we're actively considering, " says Health Minister Jonathan Coleman.  "We'll continue to keep a watching brief on the emerging evidence. We await the results of research from the University of Waikato and University of North Carolina. There's no single solution that will fix obesity."

The surprise announcement has delighted health campaigners here and in the UK, while angering drink makers -- with the UK following France, Belgium, Hungary and Mexico, which have already introduced similar levies.

Auckland Regional Public Health Service epidemiologist Dr Simon Thornley has welcomed the move, and hopes our lawmakers will follow suit.

"In my view, sugar needs to be treated like tobacco with progressive tax increases. The situation in New Zealand is very similar to the UK, with high levels of childhood and adult obesity. As well as limiting weight gain, this tax is likely to lead to major savings on children's dental health."

University of Otago's Professor Tony Blakely says the UK's move is "an important moment in public health policy".

"The tax will lower sugary drink consumption, not only through a signal to consumer pockets, but also by changing industry behaviour."

Celebrity chef Jamie Oliver also welcomed the announcement, after long campaigning for such a move. He told BBC News it was "a big moment in child health" and a "symbolic slap" to business, rather than "anti-business".